On behalf of the Mayor and City Council of the City of Santa Monica I want to thank you for the opportunity to give testimony before this subcommittee. I am the Director of Environment and Public Works for Santa Monica and one of my major areas of responsibility is management of the City’s drinking water production and distribution system. I would like to share with you today our experiences with MtBE in Santa Monica. Santa Monica is a city of nearly 90,000 permanent residents and over 250,000 daily commuters and visitors. The City depends heavily on groundwater for its drinking water supply. After many years of effort, by 1995 we had been able to maximize the use of local groundwater supplies and achieve 70% water self-sufficiency. This was an extraordinary accomplishment in arid Southern California. By using our sustainable local water resources we were therefore able to reduce our reliance on increasingly scarce water transferred from Northern California and the Colorado River. This all changed in 1996 when Santa Monica was hit with a drinking water catastrophe caused by MtBE. Within a six month period, MtBE forced Santa Monica to shut down most of its water wells. These wells had accounted for about one-half of our total daily water supply. We now purchase more than 80 percent of our drinking water from outside sources, putting further strain on California’s already fragile water supply system.

By now, we all know too well the pernicious characteristics of MtBE:

· Once it leaks from a tank or pipeline, MtBE travels quickly and readily dissolves in groundwater;

· MtBE has an uncanny ability to find its way into drinking water wells that may have never been impacted in the past by any of the other chemicals in gasoline;

· MtBE attacks swiftly. MtBE levels in the City’s wells rose more quickly than any other water contaminant we had ever encountered; and

· MtBE strikes at the heart of public confidence in the safety of drinking water supplies. People will not drink water that smells and tastes like turpentine, nor should they be expected to.

Although the effects of MtBE on Santa Monica have been devastating, what has perhaps been the most frustrating for us is the recalcitrance of the polluters (oil companies and MtBE manufacturers and distributors) to accept their responsibility and clean up the mess they have caused. Initially, the significant financial burden to investigate the MtBE contamination, identify who was responsible for the releases, evaluate clean-up alternatives, and purchase replacement water was placed unfairly on the backs of Santa Monica’s citizens.

It was not until eighteen months after we had started shutting down our wells that we were able to reach an interim agreement with two large oil companies to reimburse the City’s past costs and pay for the ongoing costs of dealing with the MtBE problem. This interim agreement lasted only two and one-half years before it was allowed to fall apart by the oil companies; most likely, due to the quickly escalating projections for the cost of MtBE remediation. The estimated cost to clean-up Santa Monica’s main well field is now over $250 million. Current estimates for the total cost of nationwide MtBE clean-up are $30 billion and counting.

With no other acceptable options available to us, Santa Monica filed a lawsuit against eighteen oil companies and MtBE manufacturers/distributors in June, 2000. Santa Monica did not want to file a lawsuit. From the start, our motivation has been to reach a settlement and get on with the task of restoring our drinking water supply. But, we do not believe it is right for our water customers to pay for any of the costs to do so. Two years after filing our lawsuit, we were able to reach a new settlement with two of the major oil companies. This settlement, if approved by the courts, guarantees that Santa Monica’s water will be cleaned up as quickly as possible, with the full cost borne by the polluters. Our best case projection, however, is that our local drinking water supplies will be back on line by 2008, fully a dozen years after our MtBE problem started.

Our lawsuit against the other companies continues, and must continue under the terms of our settlement to make sure that every responsible party ends up paying their fair share to restore Santa Monica’s groundwater resources. Santa Monica will eventually overcome this MtBE crisis, but the price will be steep. It is only fair that costs for remediation of MtBE and other water contamination must ultimately be paid for by the polluters. But, as we have found in Santa Monica through painful experience, it is frequently only the prospect of a very expensive jury judgment intended, perhaps, to punish them for their past misconduct that will bring many of the MtBE polluters to the negotiating table.

Public water agencies need to make use of every legal tool at their disposal to ensure that polluters ultimately do what’s right. If a defective product is produced and sold, then the damages caused by such a product should be the responsibility not of the customer, but of the companies that made it and sold it. If MtBE is a defective product, then there is no legitimate justification for treating it differently than any other product in the economy. It would be very harmful to Santa Monica and many other communities to prevent product defect liability claims against MtBE just as we are struggling to ensure that MtBE polluters deal expeditiously with the serious water contamination problems they have caused. We need your support, and I thank you for your consideration and assistance.